EMERGING MARKETS-Latam FX rise against muted dollar, commodity prices weigh on stocks

By Shashwat Chauhan and Ankika Biswas

Feb 19 (Reuters) – Most Latin American currencies climbed against a subdued dollar on Monday in light trading as U.S. markets were closed for a public holiday, while weak commodity prices weighed on Latin American stock markets.

As of 2:55p.m. ET (1955 GMT), MSCI’s gauge for Latam currencies .MILA00000CUS was up 0.2%, with the U.S. dollar losing some steam after a five-week winning streak on strong inflation data.

U.S. market participants were away on account of the Presidents’ Day holiday.

Leading the gains, Chile’s peso CLP= rose 0.5% against the greenback, coming off a seventh consecutive weekly loss, while the Peruvian sol PEN= climbed 0.6%.

The Brazilian real BRL=touched an over one-week high, last up 0.1%, after a central bank index showed economic activity expanded by 2.45% in 2023, surpassing initial forecasts of tepid growth in a high-interest-rate environment.

“These data, overall, underline the relatively positive picture of the economy at the end of the year, thanks to falling inflation and interest rate cuts,” said Andres Abadia, chief LatAm economist at Pantheon Macroeconomics.

“Still, conditions are far from usual, and further policy normalization will be needed.”

Mexico’s peso MXN=edged 0.1% higher ahead of the release of minutes from the country’s central bank’s last policy meeting on Thursday, where it held rates at 11.25%.

A Reuters poll showed Mexico’s headline inflation rate likely eased in the first half of February, reinforcing bets its central bank could soon lower rates. Separately, national statistics agency INEGI’s preliminary estimate showed theMexican economy likely grew 2.2% in January year-on-year.

Meanwhile on Sunday, ahead of a presidential election in June, huge crowds filled Mexico City’s main square in support of the , accusing President Andres Manuel Lopez Obrador of trying to weaken the body.

Among others, Colombia’s peso COP= lost 0.3%.

A gauge of EM stocks .MILA00000PUS was largely muted, with Mexican shares .MXX losing 0.5% as global copper prices came under pressure, while crude oil prices also steadied. O/R

Among individual stocks, Carrefour Brasil CRFB3.SAdropped 2.4% after news billionaire Abilio Diniz, who served as the vice chairman of the retailer, had died on Sunday.

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Key Latin American stock indexes and currencies:

Stock indexes

Latest

Daily % change

MSCI Emerging Markets .MSCIEF

1015.94

-0.03

MSCI LatAm .MILA00000PUS

2553.57

-0.01

Brazil Bovespa .BVSP

128696.09

-0.02

Mexico IPC .MXX

56873.23

-0.45

Chile IPSA .SPIPSA

6382.51

0.72

Argentina MerVal .MERV

1079190.17

1.297

Colombia COLCAP .COLCAP

1218.96

-3.02

Currencies

Latest

Daily % change

Brazil real BRBY

4.9606

0.09

Mexico peso MXN=D2

17.0383

0.07

Chile peso CLP=CL

965.8

0.53

Colombia peso COP=

3915.5

-0.29

Peru sol PEN=PE

3.7849

0.60

Argentina peso (interbank) ARS=RASL

836.7000

-0.19

Argentina peso (parallel) ARSB=

1090

0.46

(Reporting by Shashwat Chauhan and Ankika Biswas in Bengaluru; Editing by Emelia Sithole-Matarise and Chris Reese)

((Shashwat.Chauhan@thomsonreuters.com;))

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